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The crypto yield farming and harvesting space continue to grace crypto investors with more opportunities for passive income earned. Decentralized finance protocols have emerged as a lucrative opportunity for retail and institutional investors. Notably, the total value locked in DeFi protocols is currently at an astonishing $87.43 billion.
Moreover, staking is becoming popular even for platforms that previously depended on minting crypto. Ethereum is among the top blockchains, transitioning into proof of stake, increasing the flexibility and earning opportunities for its users.
However, more methods are coming up to help traders yield more returns from staking their crypto. One such way is compounding your interest. It is similar to the mechanism in traditional banks where a deposit or a loan accumulates interest depending on the period involved.
Therefore, compounding interest in crypto entails putting back the interest you gather from your investment to increase your earnings.
Depending on the coin one chooses, the annual income from compounding will vary. Having a reliable platform to back up your endeavors will be best to protect the future of your investment. Here is a list of 5 platforms you should take into account when looking for somewhere to compound your crypto interest:
While it is not part of the newer protocols entering the market, BlockFi remains one of the most prominent platforms supporting compounding. Founded in 2017, the exchange continues to be a trusted provider of digital asset management services. It boasts an array of licenses building the trust it needs to progress as a crypto platform.
It offers lucrative interest rates (ranging from 4.5% to 8.6%, depending on the currency) with no limitations to how long you can hold your investment. Furthermore, it has compound interest opportunities on its BlockFi Interest Account, presenting returns for what you deposit. You will not incur any fees from the interest accounts you will have. Unlike most of its counterparts, it also does not need you to stake native tokens to get higher returns.
You have various options to collect your earnings, including in the currency you deposited in or another. It further has an easy-to-use interface with high-security standards for the convenience of its users. Other services it has are lending, trading, reports, among others.
However, it has a limited amount of coins available for the services, including BTC, ETH, LTC, etc.
The Drip Network made its debut in the market in 2021, leveraging the Binance Smart Chain ecosystem. The platform employs a deflationary mechanism to ensure the value of its token, $DRIP, increases over time. As a long-term investment opportunity, its smart contracts are a doorway to lucrative compounding opportunities.
The Faucet contract allows users to reduce investment risks while increasing the overall earnings. A user gets a 1% return every day from the deposit they make all year round. As such, they can achieve a 365% maximum interest from the investment they make.
Drip also provides referral options, more deposits, and rolling rewards to increase a user’s compound earnings. The referral program earns users bonuses depending on the growth of their teams (including referral deposits and bonuses from referred parties). It assures users of the rewards they are promised, collected from 10% tax from all Drip transactions on the network.
Compounding transactions have a lower tax rate (5%), unlike the normal Drip transactions. All dividends you garner from your activity on the platform are redirected to the Faucet contract, creating a more long-term outlook for your investment.
PancakeSwap ranks as one of the most popular decentralized exchanges. It utilizes an automated market maker (AMM), running on the Binance Smart Chain. It also supports liquidity pools, where users deposit funds in exchange for liquidity tokens for providing liquidity. It also supports yield farming and staking services, offering high APY, fast transactions, a straightforward user interface, among other advantages.
The platform introduced auto compounding on April 30, 2021, on Auto CAKE Syrup Pool. The process is easy since you only have to stake CAKE for zero fees. Then, other uses will harvest and restake your funds while collecting the 0.05% bounty from the pool. The Auto CAKE bounty rewards the users who initiate the compounding option every time they claim the amount.
You can withdraw your staked funds for no fee after 72 hours of staking, before which you will incur a 0.1% fee. Notably, every time you stake more tokens, it will reset the withdrawal time. Another point to note is you will incur a 2% performance fee for the interest you harvest from your staked funds. All fees go to burning, a deflationary mechanism helping in increasing the value of the CAKE tokens.
Titano is a new platform offering its users auto staking and compounding services. Unlike other platforms, auto compounding is a reward the platform offers its users to gradually increase the overall value of their investments. As such, if you are a holder of the $TITANO token, you are assured of this feature automatically.
The compounding is not the only thing the DeFi protocol has for its users, as the auto staking process is also easy to go along with. All you have to do is buy the tokens, hold them in your wallet, and let the system do the rest for you.
It also boasts a high fixed APY (up to 102,483.58%) depending on the reward rebase, which happens every 30 minutes. Depending on whether the protocol's Risk-Free Value (RFV) sustains the rebase reward for 365 days, then the earnings you gain will be calculable.
The TAP (Titano Auto-staking Protocol) system and auto compounding are not the only way to add to your income. The Prize-Linked Accumulated Yield gives you a chance to play an easy game and get a chance to win large payouts every week. Holding the $TITANO token gives you access to the game. Also, you can rest easy knowing that losing the game does not mean losing your initial investment.
To find more about P.L.A.Y, click here.
Despite the ups and downs facing DeFi, CAKE DeFi is one platform still holding its ground as a legit compound interest-earning space. The company's base is in Singapore, with Bitcoin, Ethereum, and Tether as the major currencies offered.
The mission around CAKE DeFi is to provide a transparent ecosystem for high returns while maintaining full custody of your investment; it favors both novice and pro traders. Not only do you take advantage of the DeFi services offered, but you also benefit from the easy-to-navigate user interface.
You can earn as high as 131% APR with various pathways, including lending, liquidity provision, staking, and compounding interest. A higher market volatility during your endeavors on the platform allows you to earn more.
For the compounding services, you have an option to turn on the automatic service or leave it as manual. The same applies to auto purchasing on the platform. Every time the system confirms the rewards you have earned from your investment, it converts them to additional funds for you to earn from.
A significant downside with the CAKE DeFi platform is the limited tokens available to sustain your compound interest earning.
Compounding is a sure way to bolster your earnings in the long run, especially if you are invested in long-term income-earning pathways. The above are notable names presenting both security and high returns from crypto compounding.
However, you should take your time to study the markets personally and understand the risks you are taking. Always make sound investment decisions before taking any step to prevent huge losses from a volatile market.